* Without such access to R&D research, the agreement essentially has no value to Careway on a stand-alone basis. Milestone Payment Revenue Recognition * In accordance with codification 605-28-20, a milestone is achieved if the event would result in additional payments being due to the vendor. * Therefore, the milestone payments cannot be recognized as revenue until the date of the first launch, when revenue is earned and more payment comes due to SolvGen from Careway. * Since R&D does not represent a deliverable, the milestone payments are essentially an up-front payment for the license and distribution deliverable. * Milestone payment revenue should then be spread out on a pro rata basis as products are distributed under the license and distribution agreement.
Even though the p-value for our Intercept and DAYS increased, it didn’t affect the significance of our model. Getting rid of PAYOR variable didn’t have much of a significant change on our PHYS p-value as it did for our Intercept and DAYS. The overall p-value changed from 2.73E-63 to 1.51E-64, however, the number is still low and there is still a low chance of inaccuracies in this model right now. In order to make this model more accurate, I am going to take PHYS out of the
E&Y reasoned this as it creates an exception to the general rule of reserving for expected future product returns at the gross sales price and deferring the recognition of an equal amount of revenue. This justification is invalid. The company’s customers are not “ultimate customers,” but are wholesalers that sold their product to retailers. In addition, Medicis’s returns were not returns of products in exchange for products of “the same kind, quality, and price,” but of unsalable product for
Week 7 – CheckPoint - Nortel Networks Case Nortel enters into guarantees that are defined and meets guidelines as laid out in FIN 45. Nortel usually guarantees the purchaser of business that is conducted by Nortel in the event that a third party asserts a claim against the purchaser, which would become a liability that is retained by Nortel as defined in their agreement. Nortel is has been unable to estimate the potential for maximum liability, since these type of indemnifications of guarantees do not have a maximum amount and the amounts are dependent upon the future contingent events. As mentioned in Nortel’s notes they have not historically made any significant indemnifications payments under any of the agreements that have been accrued in their financial statements. Intellectual property indemnifications obligations have a maximum amount that may be paid under these agreements of $48 million as of December 31, 2004.
* What are the legal requirements? * Didn’t break any laws, related to him applying company funds towards personal use even though his act was solely beneficial to himself alone. What are the ethical duties? * Maintain price-competitive markets will ensure that scares resources are used to optimally satisfy consumer needs. * Pareto Optimality wasn’t obtained because maximum benefits of most wanted goods and services produced at minimum cost of least wanted resources.
D. adherence to the matching principle requires it. E. There is no good reason. * * 43) A “capital lease” is really * * A. A temporary rental of something * B. A better lease than a non-capital lease * C. A purchase of the
The accounting procedures are the same and the criteria that must be met is the same the only difference is the profit or loss of the dealer or manufacturer. Operating Leases Operating leases are those that do not fall into any of the other lease categories and mainly are leases that usually pertain to rental of property or equipment that the lessee does not intend to own at the end of the lease term. The operating leases are accounted for by the lessor in the following: The initial direct costs will be deferred and allocated over the course of the lease term in proportion of the rental income recognition. Summary Leases can be a beneficial tool for companies to get property or equipment that they might not otherwise be able to afford at this point; however, much goes into the classification and reporting of leases. For 35 years the accounting standards relating to leases has been the same, but the FASB is now looking into the issues with lease and are set to issue a new ruling on certain parts of the lease reporting.
While these agencies lawfully go into such it doesn’t mean that they have to be governed by the CICA. These are instances where they may be exempted from this requirement. Additionally, it is important to note that contracts that are non-procurement in nature such as those that come from agencies that used other transaction authority (OTA) or comparable authorities are not covered under the CICA. The reason is simple, the CICA was made to govern procurement contracts and those that have a different category lies outside its jurisdiction or authority. CICA is solely focused on procurement procedures.
The parties agree that partial performance will be good enough and the person who carries out some of the work is entitled to as much as he has earned. ← Unjust enrichment and Quasi-contract – Where there is no valid contract because the contract has been breached, or is void, or was never binding. ← The Court ordered payment on the basis of QM or QC, as indeed, at common law, there was no contract that he had performed services (See Carven-Ellis v Canons Limited (Carver 355)) ← Substantial performance ← A party who has performed his obligation except for matters of a minor character will be allowed to enforce the obligation of the other party subject to a counterclaim for damages in respect of the defects. (Hoenig v Issacs case P. 32 Unit 3) ← Discharge by breach of contract - a party may repudiate( or refuse to be bound) by his contractual obligations, either before or at the time performance is
It is particularly relevant in case of revenue recognition, sale and purchase agreements, etc. Examples A lease might not transfer ownership to the leasee but the leasee has to record the leased items as an asset if it intends to use it for major portion of its useful life or where the present value of lease payment is fairly equal to the fair value of the asset, etc. Although legally the leasee is not the owner, so the leased item is not his asset, but from the perspective of the underlying economics the leasee is entitled to the benefits embedded in the use of the item and hence it has to be recorded as an asset. A company is short of cash, so it sells its machinery to the bank and obtains it back on a lease. It is called sale and leaseback.